Thursday, May 7, 2009

Telkom Sells Media Arm to Shenzhen Media

South African fixed-line operator Telkom has sold its 75 percent interest in Telkom Media to Shenzhen Media South Africa for a nominal amount. Last year, Telkom announced its decision to significantly reduce its investment in Telkom Media.

Subsequently, various expressions of interest were considered, some of which led to further negotiations with interested parties in a process to find a new majority shareholder for Telkom Media. However, the process was unsuccessful and on 25 March Telkom announced that a Telkom Media shareholders' meeting had been called to approve the winding up of Telkom Media.

In a final attempt to prevent the winding-up of Telkom Media, Telkom launched an accelerated sale process for Telkom Media shareholders equity and loan accounts. Telkom said it was only prepared to consider unconditional offers backed with adequate financial guarantees. An invitation was sent to parties who, in one way or the other, had expressed an interest in Telkom Media.

The accelerated process resulted in an agreement being signed with Shenzhen, in terms of which Telkom disposed of its shareholding and loan account in Telkom Media on a "voetstoots" basis. The transaction closed on 4 May. Shenzhen agreed to procure Telkom Media and to change its name within 30 days of closing.